Why the Shift to Software-Driven Mobility Remains a Challenge

According to Capgemini’s report, ‘The Software-Driven Mobility Era,’ the promise of faster innovation and smarter vehicles is yet to fully materialise for traditional automakers. Despite widespread ambitions, the shift to software-driven mobility (SDM) remains a challenging journey.

The report highlights that only 14% of organisations have successfully scaled an SDM use case, while fewer than half have moved beyond pilot initiatives. Many legacy OEMs remain tied to vehicle architectures where software is tightly coupled with hardware, slowing innovation and limiting connectivity.

Yet, the automotive sector is now moving beyond software-defined vehicles (SDVs) toward a broader vision of SDM. This transition goes beyond embedding software in vehicles—it aims to redefine the entire mobility ecosystem through software.

Automakers worldwide are responding by building in-house software capabilities, restructuring operations to prioritise software, and forming strategic partnerships with tech companies, hyperscalers, and startups.

For example, Ford created Model e, a dedicated business unit offering services such as interior digital experiences and OTA updates for internal combustion engine (ICE) vehicles. In 2021, Renault Group launched Mobilise, a next-generation brand focused on shared, electric, and connected mobility solutions. Meanwhile, Mercedes-Benz partnered with Microsoft to enhance its in-car experience, integrating AI-powered features like the ChatGPT-based “Hey Mercedes,” Microsoft Teams, and Intune into its MB.OS, with plans to bring Microsoft 365 Copilot to vehicles soon.

Speaking to AIM, Anuraag Bharadwaj, VP & head automotive industry platform at Capgemini, emphasised that the gap isn’t due to lack of ambition, but the structural transformation that SDM demands.

“The automotive industry has traditionally been mechanical at its core. Today, it’s transforming into a connected, intelligent ecosystem. But that shift isn’t just about technology—it’s about changing how companies think, build, and deliver,” he explained.

Why Most Automakers Are Struggling to Scale

Despite the clear vision, most automotive players are stuck in the pilot stage of their software journeys. Bharadwaj mentioned that the barriers fall into three core areas — architecture, talent, and mindset.

In terms of architecture, many companies still have legacy platforms where hardware and software are tightly coupled. Decoupling them is complex, it’s like rebuilding the aircraft while flying it.

Furthermore, there’s a massive need for software engineers, data scientists, and DevSecOps talent who understand real-time, safety-critical systems. In fact, the future workforce needs a hybrid DNA of part engineer, part coder, part systems thinker.

New roles are emerging such as AI safety engineers, embedded DevSecOps leads, OTA product managers, and edge AI architects.

In the end, “OEMs are used to multi-year production cycles. Software, on the other hand, thrives on agility, sprints, and iteration. That cultural shift is tough,” Bharadwaj added.

Adding further context, Ganesh Sahai, CTO of Nagarro, told AIM that scaling software-driven mobility is more complex than technology alone.

“The real world we experience daily is filled with complexities that the human brain captures and processes in ways AI models are only beginning to replicate,” Sahai said.

While current AI has made impressive strides, the gap between what works conceptually and what scales in real life remains significant, underestimating regulatory constraints, infrastructure dependencies, edge cases, and operational economics that emerge only at scale. 

In software-driven mobility specifically, autonomy levels have steadily increased, and some use cases have succeeded by solving narrow, well-defined problems, while the grand visions of fully autonomous fleets and seamless integrated platforms are progressively moving from aspiration to reality. 

“We’ve proven the technology works in controlled scenarios; the exciting challenge ahead is achieving sustainable scale across the messy, unpredictable conditions of diverse real-world environments,” Sahai added.

India’s GCC Advantage

Global capability centres (GCCs) in India are believed to be the critical lever to close the execution gap in software-driven mobility. 

With a huge corpus of talent, scale, and cost efficiency, India itself is a global hub for software-led automotive innovation. Bharadwaj noted that, “India has the engineering depth, AI/ML capabilities, and now a growing base of software architecture experts. It’s where global OEMs can build, test, and deploy at scale.” 

Moreover, organisations are also restructuring their supply chains for geopolitical resilience, with 84% exploring new sourcing markets including India, Vietnam, and Eastern Europe, as per the above report.

Beyond traditional R&D, GCCs are taking end-to-end ownership of connected mobility platforms, embedded systems, and over-the-air update architectures. According to him, “India is no longer just a participant. It’s becoming a cornerstone in global Software-Defined Mobility development.”

As automakers diversify post-COVID, India offers resilience through its strengths in EV components, semiconductor design, and advanced mobility software platforms. 

“What’s exciting is that we’re not limited to execution; we’re driving end-to-end product lifecycle innovation from concept to deployment,” Bharadwaj said.

Government initiatives like PLI for auto & semiconductors and Startup India are accelerating this shift, while the thriving tech ecosystem and deep talent pool position India as a strategic innovation hub shaping the future of connected and software-driven mobility.

He further emphasised that Indian engineering hubs have moved far beyond being mere coding centres. They have evolved into full-fledged innovation centres. Today, they own the architecture, design, and R&D for mobility software platforms. 

Bharadwaj mentioned that “We are leading advancements in zonal architectures, over-the-air updates, and complete SDM stacks. Global OEMs trust Indian teams for concept-to-deployment ownership, which speaks volumes about the depth of capability here. India is not just coding; it’s architecting the future of software-defined vehicles.” 

Moreover, the transformation extends beyond the metros, as tier-2 cities become powerhouses for SDV and SDM development. 

Locations such as Pune, Coimbatore, Kochi, Ahmedabad, and Indore are building strong capabilities in advanced mobility software, semiconductor design, and EV technologies. These hubs offer cost efficiency, strong talent retention and robust government support. This distributed model is creating a resilient innovation network across India, making us an even stronger partner for global OEMs.

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